Symantec Corporation (SYMC): Are Hedge Funds Right About This Stock?

by David Woodburn on December 18, 2013

Symantec Corporation (NASDAQ:SYMC) has been a favored stock in recent weeks, as shown by a bearish trendline of about 3 percent do. The stock did close slightly higher Wednesday (up about 0.8 percent), but the company stock has been down about 9 percent the last three months to temper what is an 18-percent rally on the year. The stock has generally had a neutral or hold rating from analysts in recent weeks, but Zacks posted a “sell” rating as recently as last week. So what is going on? Is there still upside to Symantec Corporation (NASDAQ:SYMC) stock, or is it time to stay out or get out? SYMC has seen an increase in activity from the world’s largest hedge funds lately.

Hedge fund activity in Symantec Corporation (NASDAQ:SYMC)

Heading into Q4, 40 of the hedge funds tracked at Insider Monkey were long in this stock, a 14-percent increase from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes considerably.

When looking at the hedgies followed by Insider Monkey, Jim Simons’ Renaissance Technologies had the largest position in Symantec Corporation (NASDAQ:SYMC), worth close to $275.3 million, amounting to 0.7 percent of its total 13F portfolio. On Renaissance Technologies’s heels is Cliff Asness of AQR Capital Management, with a $121.6-million position; 0.4 percent of its 13F portfolio is allocated to the stock. Other hedge funds with similar optimism encompass Peter Adam Hochfelder’s Brahman Capital, Martin Whitman’s Third Avenue Management and Gregg J. Powers’ Private Capital Management.

As industrywide interest jumped, key hedge funds were breaking ground themselves. Empire Capital Management, managed by Scott Fine and Peter Richards, initiated the largest position in Symantec Corporation (NASDAQ:SYMC). Empire Capital Management had $13.7 million invested in the company at the end of the quarter. Christopher Lord’s Criterion Capital also initiated a $11.7-million position during the quarter. The other funds with brand new SYMC positions are Eric Bannasch’s Cadian Capital, Peter Muller’s PDT Partners, and Malcolm Fairbairn’s Ascend Capital.

How have insiders been trading Symantec Corporation (NASDAQ:SYMC)?

Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the last six-month time frame, Symantec Corporation (NASDAQ:SYMC) has seen one unique insider buy and three insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Symantec Corporation (NASDAQ:SYMC). These stocks are AsiaInfo-Linkage, Inc. (NASDAQ:ASIA), Mantech International Corp (NASDAQ:MANT), Brady Corp (NYSE:BRC), Sourcefire, Inc. (NASDAQ:FIRE), and Check Point Software Technologies Ltd. (NASDAQ:CHKP). This group of stocks are the members of the security software & services industry and their market caps are closest to SYMC’s market cap.

Looking at this peer group, Symantec Corporation (NASDAQ:SYMC) is the clear favorite among hedge funds, and is about average in terms of insider interest, though Symantec Corporation is the only stock in this group to have an insider purchase made in the last six months, which is noteworthy.